The restrictions imposed last week by the Argentine Government They left US$500 million in cash stranded for three days at the country’s main airport, making local bank executives nervous amid a surge in withdrawals.
The main banks in the country they were to receive dollars from the United States Federal Reserve after importing them through Bank of America, according to sources with direct knowledge, who asked not to be identified because they deal with sensitive matters. The bills were shipped on cargo planes in $1.6 million bundles, one of the sources said.
Argentine banks have experienced a sharp increase in dollar withdrawals in its branches ahead of the presidential elections on October 22. They have been forced to import cash to meet the increase in demand and a Government measure aimed at curbing “irregularities” in foreign trade aggravated their concern.
Defining week for the Government and control over the dollar
October 10th, The Federal Administration of Public Revenues (AFIP) decreed the closure of the cargo terminal for 72 hours of the main international airport, in the midst of a strong depreciation of the peso that led the exchange rate on the Argentine black market to exceed 1,000 pesos per dollar. The South American nation allows savers to maintain dollar accounts.
Argentina’s central bank reserves have fallen sharply in recent weeks, fueling investor concern about a possible run on the financial system in the middle of the election cycle. Net reserves, the difference between the central bank’s dollar assets and short-term liabilities, are approaching a negative record of $10 billion, according to private consulting firms.
The closure of the cargo terminal at the Buenos Aires airport did not interrupt liquidity operations because the order was lifted before the deadline passed and because banks typically import more than necessary to meet customer demand, the sources said. Banks have brought in nearly $2 billion in U.S. bills since outsider candidate Javier Milei — a libertarian economist who wants to dollarize the economy — surprised by winning the August primary election, the people said.
Local entities, such as Banco Macro SA, Banco de Galicia and Banco Santander Río, worked with Bank of America to send the tickets to Argentina. The American giant has a ticket service for companies and foreign customers, and shipping to Argentina was a routine transaction.
The plane that transported the money also He was stranded for a day in Miami due to problems with the cargo terminal in Argentina, one of the sources said.
What AFIP said
The press office of the AFIP said the restriction was lifted after 24 hours, but did not give more details about the situation. Bank of America declined to comment.
officials of Local Argentine banks informally alerted the central bank about the problem, to convey their concerns to government authorities, the people said. The banks even considered sending a formal letter on the matter, the people added.
Argentine savers have already withdrawn almost US$2 billion —10% of total private sector dollar holdings—from peak deposits reached in February. The importation of banknotes from the United States is aggravating the fall in central bank reserves.